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Solution

The problem is related to Bitdefender Anitvirus 2010 setting.

Here is a solution to work around this:

1. Open the product settings and change the UI (user interface) to expert mode. 2. Go to Antivirus panel and choose Advanced Settings. 3. In the "Exclusions" list add a new path and browse to Cygwin installation binaries folder (inside EDK) and select "bash.exe". 4. Press OK and close the software and restart ISE and it should works.

"Active Virus Control" is an extra level of protection and if disabled the system should still be protected by "Realtime Protection Engine".